Question

In: Finance

The prices of several bonds with face values of $1,000 are summarized in the following​ table:...

The prices of several bonds with face values of

$1,000

are summarized in the following​ table:

Bond

A

B

C

D

Price

$972.50

$1,040.75

$1,150.00

$1,000.00

For each​ bond, state whether it trades at a​ discount, at​ par, or at a premium.

Solutions

Expert Solution

Discount bond: Price < Face value

Par bond: Price = Face value

Premium bond: Price > Face value

Bond A: $972.50 Discount bond

Bond B: $1,040.75 Premium bond

Bond C: $1,150.00 Premium bond

Bond D: $1,000.00 Par bond

jeff jeffy answered 3 years ago
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